Abstract: As the United States moves forward with future energy policy, it must address and resolve issues associated with a shift away from coal and toward natural gas. While natural gas offers a significant opportunity as an abundant and relatively clean fuel source, optimum development and use of this resource requires an efficient and effective permitting process. A long and difficult permit approval process unnecessarily hinders progress toward energy and environmental goals by delaying or even cancelling both additions to new capacity as well as the upgrading of existing capacity. This study provides information on the time required to obtain permits through the Environmental Protection Agency (EPA) New Source Review (NSR) program for refineries and for coal-fired and natural gas–fired electric generating plants. The study finds that processing times for NSR permits for the 2002 to 2014 period varied significantly across EPA regions. They were also significantly longer for coal-fired and combined cycle electric generating units as compared to that for combustion turbines. Finally, processing times were significantly longer over this period for electric generating units and refinery projects as compared to reported permitting times for projects from 1997 to 2001.

Abstract: We evaluate the approach currently used by the World Bank to measure exposure to outdoor air pollution and associated economic costs, as reported in the World Development Indicators database. We recommend that current exposure estimates, based on an econometric model, be replaced by estimates used in computing the Global Burden of Disease (GBD). The GBD combines satellite data with chemical transport models to provide global estimates of fine particle exposure. We recommend that the World Bank also use estimates of disability-adjusted life years (DALYs) lost due to outdoor air pollution produced by the GBD. DALYs should continue to be monetized using the value of a statistical life year, which is currently transferred from a US value of a statistical life (VSL) using an income elasticity of one. Going forward, it would be desirable to allow the income elasticity of the VSL to vary with income and to revisit the choice of baseline VSL.

Abstract: The concept of ecosystem services has become increasingly influential in conservation policy, uniting natural and social scientists in efforts to develop values for environmental benefits consistent with underlying ecological and social processes. Understanding the consequences for ecosystem services is crucial for crafting well-designed environmental policies and management practices. For example, in the United States, new air pollution policies are driving a reduction in atmospheric emissions of sulfur dioxide and reducing acid precipitation in the Southern Appalachians, which, in turn, is expected to contribute to the ecological recovery of the region. Linking detailed ecosystem modeling to stated preference methods, we illustrate how multidimensional ecosystems can be evaluated to identify policy priorities. We also report estimates of willingness to pay for these policies that can be used in benefit-cost analysis. We estimate these benefits to be $15.67 per year per household in the region to be achieved by 2060.

Abstract: Between 2008 and 2012, the delivered price of natural gas to the U.S. power sector fell 60 percent. This paper addresses, in theory and in practice, the effects of this negative price shock on electricity consumers and the environment. We demonstrate with a simple model that the larger the effects of gas prices on consumer welfare, the smaller the effects on pollution emissions and the smaller the increase in profits of existing natural gas–fired generators. Using detailed data on electricity prices, fuel consumption, and fuel prices from 2001 to 2012, we confirm this hypothesis. Regions that experience greater reductions in pollution emissions experience smaller reductions in electricity prices and consumer welfare.

Abstract: Compared with gasoline engines, diesel fuel engines significantly reduce fuel consumption and greenhouse gas emissions from passenger vehicles, but they emit more nitrogen oxides and other pollutants. Across countries, the market share of diesel fuel engines in passenger vehicles varies from close to zero to more than 80 percent. Using a structural model of vehicle markets in seven European countries, I show that vehicle taxes and willingness to pay for fuel costs, rather than fuel prices or supply, explain adoption. The model is used to compare the environmental implications of fuel taxes and carbon dioxide emissions rate standards.

Abstract: US climate policy is unfolding under the Clean Air Act. Mobile source and construction permitting regulations are in place. Most important, the US Environmental Protection Agency (EPA) and the states will determine the form and stringency of the regulations for existing power plants. It is widely believed that flexible approaches could be suggested in EPA guidelines or proposed by states. Various approaches would create an implicit price on emitting greenhouse gases and create valuable assets that would be distributed differently among electricity producers, consumers, and the government. We compare a tradable performance standard with three variations on cap-and-trade policies that would distribute the asset value in different ways. Keeping the value within the electricity sector by distributing it to fossil-fueled producers or consumers or spending on energy efficiency has smaller effects on average electricity prices than a revenue-raising policy. These approaches impose greater social cost, but comparable net benefits in the sector.

Abstract: The United States and many other countries are dramatically tightening fuel economy standards for passenger vehicles. Higher fuel economy reduces per-mile driving costs and may increase miles traveled, known as the rebound effect. The magnitude of the elasticity of miles traveled to fuel economy is an important parameter in welfare analysis of fuel economy standards, but all previous estimates impose at least one of three behavioral assumptions: (a) fuel economy is uncorrelated with other vehicle attributes; (b) fuel economy is uncorrelated with attributes of other vehicles owned by the household; and (c) the effect of gasoline prices on vehicle miles traveled is inversely proportional to the effect of fuel economy. Relaxing these assumptions yields a large effect; a one percent fuel economy increase raises driving 0.2 to 0.4 percent.

Abstract: The introduction of a price on carbon dioxide is expected to be more efficient than prescriptive regulation. It also instantiates substantial economic value. Initially programs allocated this value to incumbent firms (grandfathering), but the growing movement toward auctioning or emissions fees makes carbon revenues into a payment for environmental services. This paper asks, to whom should this payment accrue? If the atmosphere resource, as a common property resource, is viewed as the property of government, then the decision of how to use the revenue can be viewed as a fiscal problem, and efficiency considerations dominate. If the atmosphere is viewed as held in common, then the revenue might be considered compensation to owners and delivered as payment to individuals. This decision has efficiency and distributional consequences that affect the political economy and the likelihood and durability of climate policy. We summarize trends among six existing carbon-pricing programs.

Abstract: Several recent studies have used simulation models to quantify the potential effects of recent environmental regulations on power plants, including the Mercury and Air Toxics Standards (MATS), one of the US Environmental Protection Agency’s most expensive regulations. These studies have produced inconsistent results about the effects on the industry, making general conclusions difficult. We attempt to reconcile these differences by representing the variety of assumptions in these studies within a common modeling platform. We find that the assumptions, and their differences from the way MATS will be implemented, make a substantial impact on projected retirement of coal-fired capacity and generation, investments that are required, and emissions reductions. Almost uniformly, the actual regulation, when examined in its final form and in isolation, provides more flexibility than is represented in most models. We find this leads to a smaller impact on the composition of the electricity generating fleet than most studies have predicted.

Abstract: Using individual travel diary data collected before and after the rail transit coverage expansion in urban Beijing, this paper estimates the impact of rail accessibility improvement on the usage of rail transit, automobiles, buses, walking, and bicycling, measured as percent distance traveled by each mode in an individual trip. My results indicate that the average rail transit usage significantly increased, by 98.3% for commuters residing in the zones where the distances to the nearest station decreased because of the expansion, relative to commuters in the zones where the distances did not change. I also find that auto usage significantly decreased, by 19.8%, while the impact on bus usage was small and not statistically significant. Average walking and bicycling distance (combined) increased by 11.8%, indicating that walking and bicycling are complements to urban rail transit, instead of substitutes. Furthermore, I find that estimated changes in auto usage and rail transit usage vary significantly with auto ownership and income.

Abstract: Carbon markets are substantial and they are expanding. There are many lessons from experiences over the past eight years: fewer free allowances, better management of market-sensitive information, and a recognition that trading systems require adjustments that have consequences for market participants and market confidence. Moreover, the emerging international architecture features separate emissions trading systems serving distinct jurisdictions. These programs are complemented by a variety of other types of policies alongside the carbon markets. This sits in sharp contrast to the integrated global trading architecture envisioned 15 years ago by the designers of the Kyoto Protocol and raises a suite of new questions. In this new architecture, jurisdictions with emissions trading have to decide how, whether, and when to link with one another, and policymakers overseeing carbon markets must confront how to measure the comparability of efforts among markets and relative to a variety of other policy approaches.

Abstract: Several different economic models have been applied to try to understand how new regulations by the U.S. Environmental Protection Agency (EPA) could impact coal-fired generation in the United States as well as the electricity system as a whole. This paper provides an overview of many of the key studies and the models used to analyze the potential impacts of EPA’s rules. The regulations surveyed include the Cross-State Air Pollution Rule (CSAPR), the Mercury and Air Toxics Standards (MATS), the proposed Clean Water Act (CWA) Section 316(b) rule, and the proposed Coal Combustion Residuals (CCR) rule. The models generally agree that these regulations will result in coal plant retirements, though there is far less agreement on how much generation may retire. Assumptions about the price of natural gas and the expected stringency of regulations play a key role in determining modeling results. The models provide useful guidance for policymakers when considering the potential impact of EPA regulation.

Abstract: This paper explores the policy options available to the United States for regulating greenhouse gas emissions from aircraft under existing law: the Clean Air Act (CAA). Europe has unilaterally and controversially moved to include aviation emissions in its Emissions Trading System. The United States can, however, allow its airlines to escape this requirement by imposing “equivalent” regulation. U.S. aviation emissions rules could also have significant environmental benefits and would limit domestic emissions beyond the reach of the European Union. With new legislation unlikely, the CAA is the only plausible vehicle for such regulation. Title II Part B of the CAA does grant EPA broad regulatory authority over aviation emissions, though this authority has not been used aggressively. EPA could impose meaningful aviation GHG limits and, by using performance standards, give airlines incentives to creatively comply. It might further be possible to allow some forms of emissions trading, though the law is unclear. Emissions by foreign airlines in the United States could be covered under the act, though international law might impose barriers.